IEA: Efficiency still biggest source of CO2 abatement in energy sector, but slowing down

(International Energy Agency, 28 Mar 2019) Energy efficiency across the global economy continued to improve in 2018, with global primary energy intensity falling by 1.3%. But this was lower than improvement rates seen in recent years. Although efficiency was still the biggest source of carbon dioxide emissions abatement in the energy sector, 2018 marked the third consecutive year in which the improvement rate for energy efficiency slowed.

Energy efficiency continued to show improvements in 2018, with the global economy requiring an average of 1.3% less energy inputs for every unit of GDP than in 2017. However, the annual rate of improvement in global primary energy intensity has been falling in recent years, dropping from a high of nearly 3% in 2015 to 1.9% in 2017, and falling again in 2018.

The slowdown in the rate of energy efficiency improvement means that efficiency offset 40% less CO2 emissions in 2018 relative to 2017, although it remains the largest contributor to emissions abatement. The progressive step-down since 2015 is in stark contrast to the acceleration required in the IEA Sustainable Development Scenario.

Limited improvement in global energy efficiency in 2018 can be attributed to a number of factors. Among these is the static energy efficiency policy environment in 2018, with lacklustre progress on implementing new energy efficiency policies or increasing the stringency of existing policies.

Today only around one-third of final energy use is covered by mandatory energy efficiency policies, such as codes and standards, with only marginal coverage growth in recent years. Efforts to strengthen existing energy efficiency policies also remained weak in 2018. Increasing the coverage and strength of codes and standards is a key lever of energy efficiency gains.

Progress on policy measures such as financial incentives, market-based instruments, and information and capacity building programmes also remains limited. For example, many countries drive efficiency gains by placing an obligation on utilities to meet energy saving targets. However, these targets have not changed since 2014 in over half of the obligation schemes, globally.

The global trend regarding energy efficiency hides significant regional disparities, including certain bright spots. Europe and India both saw an increase in the rate of improvement for energy efficiency in 2018 relative to 2017. Nonetheless, slowdowns in other major regions dictated the direction of the global average.